China Mobile Games (CMGE) shares are weak in early trading this morning,  down over 14% to around $16.25.   We could not find a reason for the declining price in any U.S. press or internet portals.  However, our China due diligence team identified articles in China stating that China Mobile Games’ president was  fired  along with 9 managers and 2 vice presidents.  Here is a translated transcript  from a related article:

“CMGE issued an internal notice that CMGE removed Mr. Ying Shuling from the president position.  Along with Mr. Ying Shuling, vice president Sun Jingzhi, Vice president Du Xinxing, Chenxing Game general manager Min Shuzhong, Zhuoxin Game general manager Wang Kun, distribution and supportive center director Du Juan, Oversea distribution Group vice general manager Yang Bin, platform supportive group R&D center assistant general manager Luo Xiao, procurement director are also removed from their positions.  All these persons shall surrender their assignment and office suppliers within three days.  These persons only can come back to work upon company’s further notice.”

At this time no specific reasons were provided in the related articles as to why these individuals were fired, but we have identified  rumors :

1. Ying Shuling (President) was not “getting along “ with   Xiao Jian  (CEO), and other senior executives;

2. Ying Shuling, (President) was “taking advantage of his authority  to purchase products from a related company to make additional money.”

We encourage the company to issue a press release to discuss this issue more thoroughly.